The Impact of Oil Prices on Foreign Trade Balance: The Case of Turkiye
Chapter from the book: Akça, H. & Ata, A. Y. & Yurdadoğ, V. (eds.) 2023. Economic Policies and Transformation from Theory to Practice II.

Ahmet Kardaşlar
Osmaniye Korkut Ata University

Synopsis

Over the past half century,economic literature has intensively discussed the effects of sudden changes in oil prices on the macroeconomic performance of countries.This is of critical importance, especially for developing countries such as Turkey, whose production process largely depends on raw material imports.In recent years, some economic, political and social factors such as pandemics, regional wars, economic crises, etc., as well as practices such as supply restrictions applied by oil exporter countries, cause sudden changes in oil prices. All these issues have direct effects on the production and international trade structure of the Turkish economy. This study investigates the size of these effects with distributed lag autoregressive bounds test (ARDL) for the period 1976-2021.The results reveal that oil prices have a negative effect on Turkey's foreign trade balance in the long term. On the other hand, economic growth and real exchange rate have a negative effect on the foreign trade balance in both the short and long term. This confirms the negative impact of oil prices on Turkey's foreign trade balance in line with expectations. This confirms that sudden changes in oil prices, in line with expectations, are one of the most important challenges for a sustainable economic growth policy in Turkey.

How to cite this book

Kardaşlar, A. (2023). The Impact of Oil Prices on Foreign Trade Balance: The Case of Turkiye. In: Akça, H. & Ata, A. Y. & Yurdadoğ, V. (eds.), Economic Policies and Transformation from Theory to Practice II. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub294.c1280

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Published

October 21, 2023

DOI